OFOR -

“Shootin’ The Bull”

End of Day Market Recap

by Christopher B. Swift

​3/31/2025

Live Cattle:

From Friday's close to today's, cattle feeders have seen an increase in the price of feeder cattle by 1% via the feeder cattle index, a 3/4 percent increase in corn, a 2.4% increase in diesel fuel and a 1/2 percent decrease in fat cattle futures.  There appears no doubt the weight of the industry rides on the shoulders of the cattle feeders ability to maintain higher bidding for incoming inventory and hopefully advance fat cattle prices through manipulation weights to current extremes. Today we saw divergence between those in the industry and those outside of that may influence the industry.  Industry participants continue to believe cattle prices will go higher due to a shortage of cattle.  Today, everyone outside the cattle market seemingly thinks maybe there is a looming recession and that it might be better to contract a little in spending than expand.  Therefore, creating a slightly wider tiger trap in the fat cattle market.  The division is "if".  If the cash market can remain elevated, futures will settle to cash.  If the futures market can have an impact on the cash markets, then it may be that cash falls closer to levels of futures for then futures would settle to cash at the lower level.  

Feeder Cattle:  

Futures traders had a lot to contend with today.  Higher cash markets and lower futures widened a very narrow basis at the close on Friday, to a very wide one upon today's trade.  Futures traders were able to claw back some of the losses, but seemingly there was more selling pressure as it was more than difficult to push prices off their lows and stick than in times past.  Great expectation has been created today on both sides of the equation.  The higher cash lends towards great expectations of futures rallying to converge with cash.  The lower futures trade today lends towards great expectations of the cattle feeder, and or cattlemen, to slow in their bidding war. Hence the wide basis between those inside of the industry and those outside of.  Prepare for a great deal more of excessive price fluctuation and the divergence and convergence of basis multiple times, in a very volatile arena.  ​

Corn:

​In a surprise take of today's report, the ending grain stocks appeared to produce more price movement than the shortage of bean acres and excess of corn acres.  Corn ending stocks are interesting as at this rate of disappearance, it may be possible to put end of year corn carry out at under 3 billion bushels.  I think the market is looking at this more so than the capabilities of the farmer getting out that many acres.  I have no doubts of their ability, but the skew in acres has a potential to narrow, suggesting a few more bean acres and few less corn by the time the end of June planted acres report. ​

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Energy/Bonds:

​Energy was sharply higher today with both products hot on its heels.  My analysis that the down trend would resume is now believed wrong.  Today's price action has begun to overlap previous waves for which leads me to anticipate further upside movement in energy prices.  Bonds ended the day a tic or two higher, but only after having set a new high in this rally.  A higher bond price leads me to believe there is some need for stimulation, due to the inflation and now significantly lower US dollar.  Throw in no telling what type of market action will ensue with the Tariff's and anticipate the consumer becoming embroiled in further stagflation with expectations of further reduced government spending.  All in a time frame of expanding capital requirements to produce a pound of beef.  

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 “This is intended to be or is in the nature of a solicitation.”  Futures trading is not for everyone. The risk of loss in trading futures can be substantial; therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Past performance is not indicative of future results, and there is no assurance that your trading experience will be similar to the past performance.